EUR/USD technical analysis: On the defensive after rejection at key trendline hurdle

Shared currency has faced rejection at key trendline hurdle for three straight days.
EUR/USD may test dip demand in the next few hours.

Omkar Godbole FXStreet Contributor

EUR/USD's repeated failure to scale a rising trendline hurdle may end up enticing sellers, leading to a drop to 1.12.

The trendline connecting May 30 and June 18 lows was breached on July 6. The subsequent drop ran out of steam at 1.1193 on July 9 and the spot rose back to the trendline hurdle on July 11. Since then, a daily close above the former support-turned-resistance has remained elusive.

Notably, the pair rose above the trendline on Monday, printing a high of 1.1284 only to end the day on a negative note at 1.1257. The repeated rejection at the trendline resistance coupled with a below-50 reading on the 14-day relative strength index (RSI) indicates scope for a fall back to 1.12. Moreover, markets usually test dip demand (bull's resolve) after repeated rejections at specific levels.

As of writing, the pair is trading largely unchanged on the day at 1.12.

Daily chart

Trend: Bearish

Pivot points

1. R3 1.1311
2. R2 1.1298
3. R1 1.1278
PP 1.1266
1. S1 1.1246
2. S2 1.1233
3. S3 1.1214

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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